Bay-branded items line shelves at the Hudson's Bay store in Toronto on March 10, 2025.Chris Young/The Canadian Press
Hudson’s Bay Co. is pitching a restructuring plan to potential buyers or investors that would require an $82-million investment in the first year in order to turn around six department stores left out of liquidation and its e-commerce operations.
Canada’s oldest retailer has been severely affected by falling sales and traffic to both its stores and website, according to a confidential information memorandum prepared by Hudson’s Bay last month, a copy of which was obtained by The Globe and Mail.
Hudson’s Bay’s total sales declined by nearly 33 per cent to $1.11-billion in the 2024 fiscal year, and e-commerce sales were cut roughly in half year-over-year, falling to $142-million. Previously filed court documents show the company recorded a loss of nearly $330-million last year.
The memorandum was distributed as HBC seeks offers for either an investment in the company, a possible refinancing of the business, or to purchase all or part of its property, assets and operations.
The assets up for sale include the retail stores and distribution centres; the Bay’s intellectual property; its e-commerce platform; HBC’s 78-per-cent stake in a real estate joint venture with RioCan Real Estate Investment Trust; and an art collection and other artifacts and memorabilia dating back to the company’s founding.
Many of the Bay’s artifacts and records were donated to the province of Manitoba and the Manitoba Museum in 1994. But the company still owns the original 1670 royal charter, in which King Charles II granted exclusive trading rights over a vast swath of what is now Canada to the “Governor and Company of Adventurers of England Trading into Hudson Bay.” During the sale process, the charter “will be provided special consideration given its important role in Canadian history and significance to the Canadian population,” the memorandum states.
Canada’s oldest retailer was first granted court protection from its creditors on March 7 under the Companies’ Creditors Arrangement Act. Last week, the Bay began liquidating all but six of its stores – including 74 Hudson’s Bay locations, as well as two Saks Fifth Avenue and 13 Saks OFF 5TH stores that the company operates in Canada. While those store clearance sales proceed, the retailer has received court approval to solicit bids for all or part of its operations, in order to attempt to find a plan to restructure and continue to operate in some form.
Hudson’s Bay has set a deadline of April 30 for bidders to submit final binding proposals, and plans to submit a motion to the court to approve the successful bid by no later than May 30. If an auction for all or part of the assets is required, that will occur in mid-May.
“The Company has developed a business plan to restructure six locations, maintain its e-commerce platform and emerge from CCAA with a leaner, more profitable HBC,” the memorandum states. That portion of the Bay’s operations lost $58-million in fiscal 2024, according to the document, which forecasts a return to profitability within two years. The memo estimates the operations will require $12-million in capital investment in the first year, an additional $2-million in IT and $68-million for merchandise inventory.
The restructured operations would not include any distribution centres, according to the document. The six locations are “stores in strategic locations with a clear path to improved profitability,” it states.
The first page of Hudson’s Bay Company’s Royal Charter, 1670.Supplied
Hudson’s Bay is also selling its intellectual property, including the well-known stripe design that adorns its point blankets and other merchandise. Sales of products featuring the stripes have taken off since news of the retailer’s financial crisis became public: So far this year, the HBC stripes products have generated $5.6-million in sales, more than 70 per cent of the revenue for those products last year.
The retailer also owns private-brand product lines, including Hudson’s Bay, Distinctly Home and Zellers – a defunct discount retailer revived by the Bay in 2023 as sections within its department stores. Private brands accounted for 12 per cent of sales last year, according to the document.
The memorandum also advertises the value of 14 leased and owned properties, 12 of which HBC holds through the RioCan joint venture, and two of them valuable leases held by HBC alone. An assessment last year by real estate services company JLL valued the joint-venture properties at nearly $1.1-billion, $855-million of which is attributable to Hudson’s Bay, according to the document. Those properties also carry $725-million in total debt. Adding the remaining two leases, the total real estate value attributable to HBC is $898-million, according to the document.
Seven of the properties are buildings owned by the joint venture, while the remaining seven properties in the portfolio represent ground leases, a type of long-term lease that gives the tenant the right to develop property on the land and can extend for decades. The landlord assumes any improvements to the property when the lease term expires. The Hudson’s Bay locations at Yorkdale Shopping Centre and Scarborough Town Centre in Toronto, as well as Carrefour Laval in Montreal, are examples of ground-lease properties. In Yorkdale’s case, the Bay’s ground lease has 118 years remaining before it expires, assuming extension options are exercised. At other locations, the remaining ground-lease terms are generally between 41 and 51 years.
In addition to those 14 properties, Hudson’s Bay is also looking for bidders for dozens of other leases for its stores. Not including the ground leases, the 84-store lease portfolio was valued at $875-million by JLL, according to the document.